Employers’ liability insurance may cover you in the event that an employee decides to sue you for an accident they’ve had, or an illness they’ve suffered, as a result of their work. For example, if an employee slipped and injured themselves in your office, or while they were working on your behalf outside the office or workplace, you could be liable for legal costs and compensation.

Do I need employers’ liability insurance?

In most circumstances, having an employers’ liability policy is a legal requirement for any business that has employees, even if you only employ one other person. However, there are some exceptions:

  • if you are a family business and only employ close members of your family you are exempt (although this exemption does not apply to family businesses incorporated as limited companies)
  • most public organisations, health service bodies, and some other organisations financed by public funds are exempt
  • limited companies where you, as the owner, are the only employee (and provided you own 50% or more of the company’s share capital.

What does employers’ liability insurance cover?

If one of your employees injures themselves or becomes ill as a result of the work they do for your business, there’s a chance they could make a claim against you. In the event of a legal battle with a member of staff, employers’ liability insurance may cover you for any legal or compensation costs. Employers’ liability insurance can cover your business for any person working for, or in connection with your business. You’ll need to check your policy to see whether it includes cover for volunteers or self-employed parties. Firms may need other insurance as a legal requirement of the country their employees work in.

How much does employers’ liability insurance cost?

In Great Britain, as soon as you become an employer you’re required to have cover of at least £5 million in employers’ liability insurance. If you think you might need more cover, you will need to consider how much the most serious claim you might face could cost. You can find out how much your insurance will cost by getting an employers’ liability insurance quote.

Employers’ liability insurance: self-employed and volunteers

When you take out employers’ liability insurance you’ll need to check whether you’re protected against claims by any volunteers and self-employed individuals who suffer an injury or illness in the course of their employment with you. You’ll also need to check whether you need to buy additional cover for any interns, students on work experience, independent contractors or freelancers.

What happens if I don’t have employers’ liability insurance?

If you are required to have employers’ liability insurance and do not have it, you can be fined up to £2,500 for every day you do not have cover, or £1,000 if you refuse to show your certificate of employers’ liability insurance to an HSE inspector.

More details on your obligations under the Employers’ Liability Act can be found from the Health and Safety Executive.

For more information, visit our information page on Employers’ Liability Insurance